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What’s Really Going On

Despite recent news heralding record-breaking sellouts in Manhattan and Brooklyn, like this recent article by The Real Deal, "Brooklyn Condo Sellouts Reach Highest Value Since 2007," the outlook for New York City real estate appears a little more grim from where we sit. And our prediction is that this dark cloud over the city will continue to loom.

The way I see it, there’s going to be a fair amount of pain in the New York real estate industry coming soon—especially with construction costs continuing to rise. At the same time, the Consumer Price Index rose 2.1 percent in cities—a rate that is outpacing urban wage earners’ and clerical workers’ wages, which were not seasonally adjusted, according to the Bureau of Labor Statistics.

What Can Be Done?

With construction costs continuing to climb—New York’s jumping up 3.3 percent, according to The Real Deal—the market showing signs of growing softer in the near and midterm, and many projects already under way in the city, it becomes particularly important to use software that effectively manages construction projects as well as the assets once they become available for occupancy and subsequently occupied.

Quick Tips for Staying On Your Construction Budget

Set up automated over-budget monitoring, real-time tracking of actual costs and transactions, and compare them to the job budget with MRI and Yardi’s construction cost modules. View budget-to-actuals and commitments on a project-to-date basis, consolidated basis, calendar basis, or by completion percentage. Even conduct projected final forecasting and cash flow forecasting.

Eliminate manual data entry and maintain rules that are consistent with your core accounting system with a fully integrated construction accounting module like MRI’s and Yardi's.

Taking Optimization Further

When boom times wind down, it is important to look within to how we are operating our businesses, and it is an opportune time to get an independent assessment by a real estate tech consulting firm to ensure you are getting the most out of your system.

After more than 40 years in the business, my take is that—as it has before—New York will weather a period of correction and the residential market will once again come back strong. In the meantime, focus on sharpening your property management practices utilizing technology to improve efficiency as well as tenant and investor satisfaction, while maximizing your NOI.

About REdirect

Unparalleled experience in both real estate management and real estate systems: We are uniquely equipped to guide you through the software selection and implementation process, from discovery and planning to pilot and conversion to "go-live" and beyond.